The Case for Sharing Data: Consumers, Quality and Better Brand Decisions

Person-based data is essential for the running of our modern economy and society, and vital for brands who need consumer input for making important decisions surrounding marketing, product development and more. People benefit greatly from decisions made by individuals, organizations and computer systems on the basis of their data. In recent years, this has become even more apparent as the broad adoption of AI has vastly increased the utility of data. However, current policies related to data fail to respect the privacy of consumers and are socially inefficient.

In general, data today are owned and controlled by companies. It is frequently unclear to consumers when and where data about them are being captured or used and when it is, they are being compensated poorly or not at all and have to trust the companies using it to keep it private. Companies, however, only care about privacy to the extent that it has a material effect on their business.

Stanford University researchers Charles I. Jones and Christopher Tonetti observe that data are non-rival. Unlike most economic goods, data are not depleted through use. Because of this, there are large social gains for sharing data. A single dataset can be used simultaneously by any number of individuals, companies or AI-based systems without reducing the amount of data available to anyone else. Companies, however, are generally incentivized to hoard data they own. For many, proprietary data are the basis of their business model and a key competitive advantage. As a consequence, data that could be used productively by many at a low social cost are used only by one and society is made poorer.

Consumer Control

If we can instead implement policies and systems that allow consumers to retain ownership and control of their data, we can bring about a data economy that is close to optimal. Consumers will appropriately weigh their privacy concerns regarding particular types of data against the financial gains that come from sharing that data to interested parties. Overall, this will greatly increase the rate of sharing. Furthermore, we can increase the rate of sharing even further if we can make strong guarantees around privacy that allow for many situations in which data can be shared anonymously.

The value of data is also blurred when contained within the walls of a corporation whose primary objective is to leverage, blend, package and resell the data, or at least the access to the data or some variant of it. Many industries, including advertising and market research, have evolved where a race-to-the-bottom compensation model for consumers has emerged. Thousands of impressions are required to amount to pennies of value for a consumer, and while a market researcher may pay $5 or $10 for access to a consumer’s attitudes or opinions, the actual consumer may only realize 20 to 40 cents for their time and data.

Data Quality

Meanwhile, data quality has increasingly become a topic of concern across industries. For example, AI actually learns from data to optimize processes and outcomes. If bad data are going in, then the outcomes from this technology begin to suffer. As brands and marketers require more and more data from consumers, directly or passively, it is ever more important to support an ecosystem that facilitates the best possible set of motivations to achieve data of the highest possible quality. Too often the consumer’s best interests and user experience for sharing are ignored. Facilitating an ecosystem of consumer-first approaches by design, transparency, accountability and trust — while compensating users fairly — sets the fundamentals for achieving our goals.

Shifting data control back to consumers introduces an even further emphasis on privacy. Promises of privacy are difficult. The EU’s General Data Protection Regulation and related legislation will test corporations. While many companies may throw around terms such as privacy and transparency, shifting control and privacy to the consumer requires a series of trade-offs that eliminate certain conveniences and advantages that many companies benefit from today.

These are complex and difficult issues to tackle, but they may ultimately help support a sustainable environment for data-sharing that benefits society as a whole, even if it means we need to move incrementally toward an ideal.

How Blockchain Can Help

Blockchain-powered technology provides a basis to ensure that person-based data are widely available as a force for good in society by shifting ownership and control of that data to consumers. The right protocol can facilitate the network and infrastructure to form a marketplace. On one side of the market are individuals who contribute data by completing surveys and other data-generating tasks or by providing access to existing data sources such as health and location data. On the other side are data buyers, such as research organizations and advertisers. Between them are software and a public blockchain that allows buyers to interact directly with individuals in a way that protects the privacy of the individual, incentivizes accuracy, enforces a fair compensation model and provides transparency around data usage and payment.

As brands and marketers become more reliant on data-driven decisions, we must start to acknowledge that traditional forms of data collection and access will no longer suffice. Consumers are demanding greater control over all aspects of their online lives, and their data are no different. In order to garner quality data as the foundation for important business decisions — and to keep ahead of the curve when it comes to consumer privacy and control — we must take a different approach.


About the author | Paul Neto

Paul Neto is CMO at Measure Protocol, a blockchain-powered economy for human-generated data. With a background in market research, digital advertising, data technologies and consumer insights, Neto is passionate about how technology can change the consumer data landscape.